Stocks on Wall Street and European markets have rallied on news of a rescue plan for Greece. The bailout sent the Dow Jones Industrial Average up a massive 404 points or 3.9% to 10,785.14 – the biggest one-day gain in over 12 months.
The Australian sharemarket has opened higher once again today as well, with investors continually gaining confidence after European finance ministers hashed out a bailout plan for Greece worth over $US1 trillion in order to secure the country’s debt problems.
The new plan comes after global markets plummeted last week due to fears Greece could default on its debt, in a move that would cripple economic recovery worldwide.
The benchmark S&P/ASX200 index was up 16 points or 0.35% to 4616 at 12.05 AEST, while the Australian dollar opened slightly lower to US90c.
ANZ shares have gained 1.1% to $23.03, while Commonwealth Bank shares have gained 1% to $56.30. NAB shares rose 1.6% to $25.94 as Westpac shares rose 1.3% to $25.34.
Gordon Brown steps down to help deal with Liberal Democrats
British Prime Minister Gordon Brown has said he will step down from his role in order to help the Labour party strike a deal with the Liberal Democrats in order to keep Government control.
The announcement comes as Britain’s three major parties attempt to hash out a deal due to the hung Parliament, with Labour, the Liberal Democrats and the Conservative parties all battling it out for control.
Both Labour and the Conservatives have been wooing the Liberal Democrats in order to form a partnership, but no deal has been made. It is understood that by Brown stepping down, a Labour-Liberal partnership could be easier to negotiate.
Liberal Democratic leader Nick Clegg has said throughout the campaign it would be hard to negotiate with Brown.
“We will try to make everything as clear as possible as soon as possible,” Clegg said while appearing outside a meeting of MPs last night.
Federal treasurer Wayne Swan has said tonight’s Federal Budget will place an emphasis on delivering another surplus earlier than expected.
It comes as The Age has reported the Government will be able to produce a surplus earlier than expected in the 2012-13 financial year.
“It will be light on politics and very heavy on responsibility,” Swan told reporters this morning of tonight’s budget.
“That’s the theme of the budget tonight, putting in place the long-term reforms so that as Australia goes forward we all prosper… What we have to do is dedicate this Budget to getting back to surplus as quickly as possible.”
Ports and rail group Asciano has said it expects a $1.11 billion impairment charge for some of its businesses during the second half of the year, but has maintained that the charge will not affect official outlook figures.
Asciano has confirmed its previous guidance of 2009-10 full year EBITDA of between $675-700 million, with managing director and chief executive Mark Rowsthorn saying the company is pleased with current market conditions.
“This is a non-cash item and the overall enterprise value is not affected by the impairment due to the increase in value in other parts of the business which under accounting standards are unable to be written up”, Rowsthorn said.
“These impairment charges will have no impact on Asciano’s underlying business or overall consolidated cashflow and the outlook for the company remains on track.”
Transfield Services Infrastructure Fund has launched a $110 million capital raising in order to help the company strengthen its balance sheet.
The company has said the raising, along with a sell-off of the Mt Millar Wind Farm for $191 million, should reduce pro-forma corporate net debt to $465 million from $728 million as of 31 December 2009.
“The fully underwritten equity offer will raise $110 million and is comprised of a placement to institutional investors of approximately $30 million and an accelerated non-renounceable pro-rata entitlement offer to raise approximately $80 million,” the company said in a statement.
Google trumps iPhone in smartphone war
Google has managed to gain a lead in the smartphone war, with new figures from analytics group NDP showing shipments of Android-based handsets accounted for 28% of all unit sales in the first quarter.
Apple took 21% of the market.
Google came behind Blackberry-manufacturer Research In Motion which took 36% of the market, but topped Apple, in a morale-boosting victory for the internet-giant. Analysts have said the Android operating system is at a disadvantage to Apple, and that it faces an uphill battle to take its place as a leading smartphone maker.
However, Google was also dealt a blow after telco Sprint said it would no longer support its flagship smartphone, the Nexus One.
Airline Virgin Blue will join Jetstar and Regional Express as official carriers for Government travel, The Australian has reported.
The new arrangements will see flights purchased as a group rather than through individual departments, the publication has said.
Separately, Virgin Blue chief executive Borgetti has told the AFR that the company will increase its competitive and branding activity.
“You will see us competing in markets more aggressively,” he said. “We are not getting what I consider to be an adequate share of that [corporate] market and there is no question that at the moment there is space there.”
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
